written by: Shawn Drew•edited by: Simon Hill•updated: 11/28/2011
With the Kindle Fire tearing through sales records, the new rumor in town is about the possibility of an Amazon smartphone. The device may still be a year away, but that's no reason not to dream about what it could do to the industry.
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Fresh on the heels of the mighty success story of the Kindle Fire, the first Kindle eReader that blurs the line between reader and tablet, Amazon may have a little something else up its sleeve. Reports coming out of Asia claim that Amazon is actively working on a smartphone, with a release target of the end of next year. While at first glance the idea of an Amazon smartphone might seem a little odd, as Amazon’s self-branded electronics are all pretty much content machines like the Kindle, but in reality, Amazon could wind up breathing a breath of fresh air into a stagnating mobile market. While even just the details about the smartphone are still a long way off, there are already a few reasons to get excited.
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With the Kindle Fire, Amazon proved that it was willing to sell a device below cost in order to get content into people’s hands. The company knows that most people who want to buy a tablet or smartphone will also want to purchase apps, movies and music. With these digital products costing Amazon as little as a fraction of a cent to deliver, the company stands to make an enormous profit from content. Just like it has done with the Kindle, expect Amazon to peg its smartphone at or below its cost to create, which right now looks to be around $160. For a mid-tier device this may not seem like an amazing price, but you also have to consider the following…
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There’s currently no news about what network the Amazon smartphone might work with, so let’s consider for a moment the possibility of an unlocked device. It certainly wouldn’t be the first unlocked device released in the States, but at under $200, it could be the revolution the U.S. wireless industry is so badly in need of. An extremely popular device sold without a contract, allowing you to move it between any carrier that supports whatever wireless technology the device ends up with. Of course, Amazon could always decide to become an MVNO (basically a wireless company that rents or leases spectrum from a major carrier, like Helio or NET10), but given the difficulties that most MVNOs have in generating revenue, an open concept would be a much better fit for Amazon.
Ideally, a successful unlocked device could skew the public perception that two-year contracts are a necessary evil in the wireless world. A quality device at around $150 could easily sell without the need for the ridiculous subsidies found in the U.S., and would pave the way for much lower monthly fees, as carriers would no longer have to recoup the cost of the device.
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Let’s face it, in the wireless world your OS choices have been pretty much narrowed down to two (with apologies to Microsoft). It’s VHS vs. BetaMax, Sega vs. Nintendo, or Kirk vs. Picard all over again, but this time the competitors are Android and iOS. With all due respect to the geniuses at Apple, count me as part of the coalition that comes down favoring Android devices.
The Amazon smartphone operating system hasn’t been announced, but since Amazon does have its own Android app store and its Kindle tablets run a heavily modified version of Android, it’s not a stretch to already consider the Amazon smartphone an Android device. As evidenced by the Kindle Fire, Amazon knows how to build a slick Android-based interface, and while a smartphone will have to be a little more open to standard Android concepts, there’s little doubt that Amazon will maximize the Android experience. As a whole, an Amazon smartphone is great news to Android lovers as it will certainly increase Android’s market share dominance.
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Amazon is probably the one company that can challenge Apple when it comes to the integration of the complete user experience. Like iTunes, Amazon’s cloud service allows people to seamlessly use the same media on multiple devices. The service is already available on smartphones through an application, but one would have to figure that an Amazon smartphone would include a number of improvements. An Amazon smartphone will allow people to have a single vendor for their tablet, smartphone and content, helping to avoid compatibility headaches and failures that always pop up when devices and services from different manufacturers are forced to work together.
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Spend any time playing with the Kindle Fire and you know that Amazon has it all figured out. Tablets and smartphones, while still having plenty of productivity uses, are becoming one of the main avenues with which we consume content. Radio, television and even standard computers aren’t being phased out, but their use is diminishing as mobile devices offer a similar experience in a movable package. Amazon stands poised to take over the mid-range smartphone market by simply giving users a device designed from the top-down for content consumption. This focus on content will hopefully avoid some of the bugginess in many smartphone’s current content delivery, and may even usher in much more manageable data plans, as the current plans look to begin falling short in the next few years as mobile traffic skyrockets.
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OK, this reason is not specific to the Amazon smartphone, but it is an upside for anyone interested in the advancement of mobile devices. An at-or-below cost, mid-range, content-based smartphone that will certainly be a best-seller the moment it’s released will definitely require a response from other manufacturers. Whether this winds up causing a market-wide price drop or simply a ramping up in technological advances remains to be seen, but without a doubt an Amazon smartphone has the ability to change the mobile industry as a whole. It may be a year away, but this is one smartphone worth keeping your eye on.